Could This Be the Bottom? (property taxes, illegal, more expensive, value)
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Well ... I don't see how that's going to apply here.
If its a new neighborhood that obviously you can't base matters on their prices in the late 90's. But there are other measures that can be used. But I find it hard to believe you can't find comps from the late 90's in the area (In a different but similar neighborhood). If that is truly the case then the area is going to get killed as that is a good indication that these houses are too expensive for the area.
What are you paying in rent anyways?
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As far as renting ... it can be cheaper but I have dogs so renting is a MAJOR hassle for me.
Whats the hassle? I have cats and I had no problem finding places that were pet friendly (for both cats and dogs). We just had to pay an extra $500 security deposit.
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My point is that, at least for me, there's a lot more that goes into buying a home than "fundamentals."
Sure, but you seem to be trying to convince yourself that the prices have bottomed etc. I'm just talking about the housing market not whether its best for you and your family to buy a house right now. I have no idea! Whether owning is worth the potential lose is up to you.
I was using an example as to why someone would come off the fence and buy now even though all info points to a further decline. Negative equity..here you come!
Uh ... may I remind you that I'm buying now when prices are a lot lower than they were ...
I won't be paying $550-600K like these homeowners did. I'll be paying a lot less than that.
True you are not buying at the top, and the post was not directed specifically at you and your situation but at the attitude I have heard so many times that downplays home buying as an investment. It is after all the most important decision most people make. Salesmen are very skilled at playing peoples emotions and pushing them into buying when it is not in there best interest to do so, then standing back and denying responsibility while cashing their fat commission checks. Bottom line is you can save a lot of money over the course of your life by paying less for a home. Remember if you keep your home for the life of a 30yr. loan you will pay $3 for every $1 in sales price. That means the real price of that house is $900.000 not $300,000. When you look at it like that, it is still pretty expensive for what you are getting.
Do any of you have any suggestions for those of us who did buy high?? I'm at least 150,000. mortgaged over the value of my condo. Not only that, it is sickening to see houses that I really wanted going for what I am paying for my condo. I do not agree with the mortgage defaults by people who are buying lower then letting their first mortgage default. Suggestions anyone?
Well you already know the options.
A) You tough it out, and allow this mistake to affect you for many years to come.
B) You face the fact you screwed up, cut your losses, and go on with your life hopfully having learned something.
Those are the only 2 options. Just make sure you are making the right decision for the right reason. Ask yourself if your concern is ethics or just pride. In the real world, time is the most valuable asset you have, once wasted, you can not get it back. When this whole thing is behind us I do not think anyone will be holding it against people who did default, after all there will be millions of them, it will be like the great depression, people will just say they had tough luck. Remember it is just buisness, and buisness has rules, the first rule is to know when to walk away from a bad deal.
Actually ... I think you're right. After doing some more research there are some pending sales that look like they're going to come in a lot lower so ...
You guys have convinced me to wait at least until I see what these new comps look like.
Location: Halfway between Number 4 Privet Drive and Forks, WA
1,516 posts, read 4,589,290 times
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Well you already know the options.
A) You tough it out, and allow this mistake to affect you for many years to come.
B) You face the fact you screwed up, cut your losses, and go on with your life hopfully having learned something.
Those are the only 2 options. Just make sure you are making the right decision for the right reason. Ask yourself if your concern is ethics or just pride. In the real world, time is the most valuable asset you have, once wasted, you can not get it back. When this whole thing is behind us I do not think anyone will be holding it against people who did default, after all there will be millions of them, it will be like the great depression, people will just say they had tough luck. Remember it is just buisness, and buisness has rules, the first rule is to know when to walk away from a bad deal.
Jimhcom,
Your posts always make alot of sense to me, but I'm going to interject on this one.
The OP probably does have other options:
She can choose to rent the condo (rather than suffer the negativity of a foreclosure for seven years) or
She may choose to wait and see what happens with the house bill that is supposed to allow a forgiveness for those who are upside down in their mortgages...
Jimhcom,
Your posts always make alot of sense to me, but I'm going to interject on this one.
The OP probably does have other options:
She can choose to rent the condo (rather than suffer the negativity of a foreclosure for seven years) or
She may choose to wait and see what happens with the house bill that is supposed to allow a forgiveness for those who are upside down in their mortgages...
...or if she wants to leave the place... she can still try to do a short-sale and reduce the damage. Yes, I agree, walking away should be the last option.... but, they won't be getting out totally scott-free... they are getting serverly dinked on their credit... and who knows what the banks will do in the future.
I think everybody on the side lines should wait. If everybody waits, everybody saves (that's if your rent is less than a mortgage), then our national banks will have more savings. This in turn will allow America to have a higher savings rate and let banks loan money on better terms (instead of relying on MBSs).
Of course we'll face a major contraction, but we need that! Just get a recession proof job that requires face time or work internationally. Learn a foreign language. Or make sure you can grow your own food, and have an ample emergency fund in case you get laid off (you can use your down payment for that).
In a year or so the landscape would be different... with higher regulation... more rules... fewer new construction (like in the early-mid nineties where there was hardly any new housing stock) and a lot of the properties bought off by foreign investors taking advantage of the prices, their strong currencies, and new found wealth (have you gone and looked at houses today? notice the number of foreigners? to them our housing stock is a steal - let's see what happens when the Yuan is set free and rises more). Then you can see what you can buy when everybody else that has waited buys... the inventory has deteriorated (ie, spoiled from none maintenance or from being empty or being rented... wonder how much you'll spend on repairs and preparation? have you guys seen what you get with foreclosures these days?)... that's if you were even able to save... and still have a job....
There's good and bad things about waiting.... like jimhcom said... time is the only real asset. you'd be a magician if you can actually time the market.
What do people see as the landscape in a year or so from now? I'm usually a realist/optimist... for this post though, I'm painting a dire picture for the American buyer.
* I already know what bottom rider and humanoid are going to say :P ... lay down the personal attacks.
Hi Humanoid... that's another thing that can skew the income to housing price ratios. Population gains and foreign investors. Population increases means more people will live in the same place... so their median incomes are all low/average but their total income of two-three households is enough for them to buy a place ... while foreigner purchases... their payments are in cash... and their incomes aren't documented.
Jimhcom,
Your posts always make alot of sense to me, but I'm going to interject on this one.
The OP probably does have other options:
She can choose to rent the condo (rather than suffer the negativity of a foreclosure for seven years) or
She may choose to wait and see what happens with the house bill that is supposed to allow a forgiveness for those who are upside down in their mortgages...
If she is 150k upside down, renting would probably mean struggling with a negative cash flow. I doubt if the government is going to be able to do anything to help, it would mean assuming those mortgages thru a federal agency and raising taxes to service them, and there is too much resistance to do that, not to mention the government is upside down itself. If they do anything to jack up the debt, the dollar will freefall and inflation will be even worse than it is now. I wish I was more optimistic about the future than I am but the numbers look really bad. Just looking at the PPI vs. CPI numbers tells me inflation is going to be much worse in the next year or two. What we are looking at right now is the perfect financial storm. My advice is to be realistic and be as financially conservative as you can be.
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